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How Institutions Moderated the Pandemic's Economic Impact in EU Member States

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  • Vytautas Kuokštis
  • Ringailė Kuokštytė

Abstract

We investigate how institutional quality affected the economic downturn in EU countries during the COVID‐19 pandemic (2020–21). Using quarterly panel data, we show that countries with a higher quality of governance and a higher score of economic freedom suffered markedly less. Importantly, institutions mattered more when the pandemic shock was larger. Thus, the pandemic highlights the asymmetric impact of seemingly symmetric exogenous shock on EU economies and raises important issues about the necessary reforms for short‐run resilience and long‐run convergence.

Suggested Citation

  • Vytautas Kuokštis & Ringailė Kuokštytė, 2023. "How Institutions Moderated the Pandemic's Economic Impact in EU Member States," Journal of Common Market Studies, Wiley Blackwell, vol. 61(2), pages 503-525, March.
    • Handle: RePEc:bla:jcmkts:v:61:y:2023:i:2:p:503-525
    DOI: 10.1111/jcms.13385
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